Tuesday, April 10, 2012 | Edited by Daniel Moores
Apparel Business Showed Marked Improvement in 2011

The news was good for clothing retailers in 2011, with apparel sales posting an overall growth rate of 4% and revenues of $199 billion, according to the Consumer Tracking Service of The NPD Group.

The growth of dollar sales in the men's apparel category led the way in the adult apparel market with an increase of 4 percent. Women's apparel grew by 3 percent and children's apparel climbed 6 percent.

"This is a marked improvement over the prior years," said Marshal Cohen, chief industry analyst, The NPD Group, Inc. "I believe this is testament to the use of sales and value pricing by retailers that did in fact get the consumer to respond. I think this also goes back to the 'Frugal Fatigue' phenomenon we have been watching. It seems to have materialized for apparel in 2011 as consumers finally got back to building their wardrobes again."

There were some standout categories in the women's market that benefited from renewed interest in fashion. Dresses, for one, continued with double digit growth in 2011, posting a 17 percent increase in dollar volume sales. A complement to dresses, women's hosiery, posted growth as well. Tights and sheer hosiery combined grew 8 percent last year. Women's intimate apparel also showed encouraging growth, up 6 percent over 2010.

"Looking at the women's market numbers it becomes evident to me that it wasn't necessarily the 'big' categories that had the most impact, it was the smaller items that helped to drive growth. It was also those products that brought 'newness' to the party that helped," said Cohen.

"The women's apparel market continues to be the barometer of the health of the overall apparel market...as goes women's, so goes the market."

In the men's apparel market, the categories that helped to propel growth were those related to the "dressing-up" trend. Dollar volume sales for men's dress shirts were up 14 percent, men's suits sales were up 23 percent, and sport coats were up 20 percent. Last but not least, men's underwear sales for 2011 rose 7 percent.

"The men's market has benefitted from the economy," said Cohen, "It's about the job, keeping it or getting it. Younger men are looking to 'dress the part' while older men are also looking to 'dress the part,' but also want to 'keep the part.' And then of course to some, sales of men's underwear is an indication of the health of the economy."

Which stores benefited from the increase in apparel sales? Manufacturer owned stores posted the highest growth rate, up 15 percent, while off-price and specialty stores were both up 6 percent. Department and national chain stores also posted growth (3 percent). The mass merchant channel showed slight improvement (1 percent).

"These channel results demonstrate that the consumer's pursuit of value has become more about 'brand names for less,' and less about getting the 'lowest prices,'" observed Cohen. "Stores and brands that have shifted with the consumer and provide an assortment of recognizable brands, a good deal, and better quality merchandise as well as having shifted away from being only about the lowest price, are the ones that have posted growth."

(Source: The NPD Group, 03/29/12)
The Restaurant Customers of Tomorrow

Three areas of the population -- those older than 55, kids under 11 and Hispanics -- offer extensive opportunities for sales growth in restaurants, an expert told attendees at the Research Chefs Association's recent 12th annual conference and exposition.

Trend watcher Liz Sloan, president of Escondido, Calif.-based Sloan Trends Inc., said that those demographics are showing growth in per capita spending and the potential for increasing foodservice sales.

Older consumers will spend extra for add-ons and are big consumers of desserts, Sloan said. "They are not the most health conscious when they get to restaurants," she added. "The younger people are."

While the 18-to-24 age group still spends the highest percentage of income on foodservice, that group is shrinking in size, she said.

Sloan also noted that there is growth being seen in the number of children under age 11, and that the ratio of Hispanic births to non-Hispanic is four-to-one.

Among younger consumers, the top three ethnic cuisines are Italian, Spanish and Thai, which Sloan said is surprising, as many would think the dishes of Mexican and Chinese cuisines would rank.

"We are going to see a lot of changes in this audience," she said.

In addition, Sloan said, a new eating occasion -- "a savoring experience" -- is developing among foodies. This more sophisticated experience is defined by "freshness, distinctive flavors and foodie narratives," she said. The use of descriptions, like Copper River salmon, grape varietals or Meyer lemons, are all examples of this more sophisticated dining experience, Sloan said.

Sloan highlighted other potential areas of growth for restaurants:

Appealing to the solo diner: "Eating alone is at an all-time high," Sloan said, with nearly half of eating occasions occurring solo. Even in families, kids are fed separately and the adults eat by themselves, she said.

Offering snacks: New and unique flavors help motivate a consumer to buy a snack from a restaurant. About 40 percent of consumers would buy a snack if it featured a new flavor. Snacking is most popular at mid-morning and afternoon.

Providing smaller sizes and dips: Smaller items, such as sliders, continue to be popular, and the consumer has expressed willingness to pay extra for some side items, such as dipping sauces.

Expanding breakfast selections: Consumers are developing what many call a progressive breakfast routine, picking up several items at several places and a specialty coffee or drink. Another breakfast "mega trend," Sloan added, is high-protein options, which go beyond eggs and include chicken and seafood. Other ideas are parfaits, compotes, yogurt and ethnic dishes.

Providing beverage options: The older customer demographic enjoys beverages. "The one thing about this older group going to restaurants is, they drink," Sloan said. When the kids empty the nest, they party. Besides alcoholic beverages, these consumers are also buying green and black tea, lemonade, raspberry lemonade and soymilk.

Countering new competition: Competitive forces on restaurants are growing, Sloan warned. Convenience stores will be providing more competition for restaurants. A survey of c-store operators published in January projected foodservice as the highest potential for sales growth in the years ahead, with 57 percent of c-store owners citing it as the top segment to improve sales, followed by 12 percent saying home-meal replacement had the greatest potential.

Providing new flavor experiences: Menus have shown "dramatic, dramatic changes in flavor preferences in the United States in the last two years," Sloan said, with profiles like "fruity" moving up second only to "grilled" among consumer preferences.

(Source: Nation's Restaurant News, 03/23/12)
Tee Time: Golf Industry Has Optimistic Outlook for 2012

Golf in the U.S. is growing for the first time in five years as an economic recovery strengthens enough to be measured in the clubs, cleats and plaid shorts that fuel the sport's $25 billion consumer market.

The number of rounds played on American golf courses has climbed for four straight months through February. Club maker Callaway Golf Co., mower-maker Toro Co. and Nike Inc., which makes golf gear and clothes, are registering revenue growth and stock gains outpacing the Standard & Poor's 500 Index.

The rebound is reflected on the links.

"It will probably be the strongest year since the recession," Cindy Davis, president of the golf unit of Beaverton, Oregon-based Nike, said in an interview. "I'd say it's definitely one of the indicators that maybe consumer confidence is coming back."

In the past few years, rounds played on U.S. courses dwindled as unemployment surged to 10 percent in 2009, and golf courses closed after a building boom mirroring the housing bubble that started to burst in 2006.

The number of golfers dropped to 26.1 million in 2011 from about 30 million in the middle of last decade, said Greg Nathan, a senior vice president for the National Golf Foundation.

"We were bouncing along the bottom and expect we'll see a modest recovery in 2012," said Nathan. "The signs since the beginning of the year have been positive." Mild winter
He said golf's consumer market draws about $4 billion from equipment, $1 billion from apparel sales and $20 billion from green fees.

The number of golf rounds jumped 10 percent in February, the most recent month for which data is available. That capped four months of year-to-year gains from the economy that were helped by a mild winter in the northern U.S., Nathan said.

Even in California, where the average temperature was about the same as last year, rounds rose 16 percent in February.

Callaway Golf, the Carlsbad, California-based maker of Razr Fit drivers, has jumped 25 percent this year compared with a 12 percent gain for the S&P 500 Index. Toro, which has about a quarter of its sales tied to the golf industry, has risen 18 percent. Nike has climbed 14 percent.

Golf's renaissance shows the effects of improving U.S. economic data. The country's unemployment rate dropped to 8.3 percent in January and February, while payrolls increased more than 220,000 per month in December, January and February.

Older equipment
Gross domestic product rose 3 percent in the fourth quarter, the highest rate since the second quarter of 2010. The consumer confidence index topped 70 for two straight months in February and January for the first time in four years, the Conference Board said March 27.

With the economy and golf industry showing signs of rebound, course managers are willing to spend on equipment, driving up sales for Toro and agricultural machinery-maker Deere & Co., based in Moline, Illinois.

"There's older equipment out there that has quite a bit of hours and courses are realizing that they need to go ahead and re-fleet and purchase new equipment," said Denny Docherty, Deere's director of global strategic marketing at the Agricultural and Turf unit.

Toro, based in Bloomington, Minnesota, raised its forecast for 2012 revenue growth in February to as much as 7 percent from 5 percent in December, partly because of increased sales to the golf industry, said Kurt Svendsen, chief of investor relations. The company announced in December it bought the Graden golf greens-roller line for an undisclosed amount.

Retail sales increase
Sales of clubs, balls, shoes and other equipment measured from 600 pro shops and 250 off-course golf specialty stores rose 1.3 percent last year to $2.41 billion, reversing a slide since 2007, said Tom Stine, co-founder of Golf Datatech LLC, which provides statistics on golf-related sales.

Sales probably will accelerate this year, he said, though they remain below the 2007 peak of $2.91 billion.

"There's been a lot more attention being paid to the PGA tour this year," Stine said.

Textron Inc.'s Jacobsen unit, which sells golf mowers, sprayers and machines that rake sand bunkers, has seen purchases increase as returning players bolster golf courses' budgets.

"We're pretty much riding the wave of the economy right now," said Glenn King, marketing manager for Jacobsen. "We're seeing a lot of pent-up demand."

'Not getting worse'
ClubCorp, the largest owner and operator of private golf clubs, sold the most memberships last year since 2005, said Eric Affeldt, chief executive officer of the Dallas-based company.

"People are feeling more comfortable spending money again because things aren't getting any worse," he said.

ClubCorp, which operates in 26 states, bought four golf courses last year and is looking for more, Affeldt said.

"We are rebounding and like what we're seeing in terms of the recovery," he said.

Nike Golf's Davis, who took over as the unit's president at the beginning of 2009 when the industry was in free fall, finally will reap the benefit of new club and ball designs that the company invested in during the lean years.

"It's going to be a good year for Nike Golf," Davis said. "It will be a year where the industry will see more positives than it has in the past three years."

(Source: Bloomberg Businessweek, 04/04/12)

Daily Sales Tip: Add Value, Not Cost

It's natural for prospects to try to negotiate the best terms possible for their company's investment.

One way effective salespeople negotiate win-win outcomes is by offering prospects more value in return for something else, whether it's a bigger purchase or a longer service contract.

This way, instead of adding costs, the salesperson is providing additional value (and getting something in return).

The important part is that the prospect views the salesperson as someone who's interested in serving his or her needs.

That goes a long way toward building trust and buyer loyalty.

Source: Adapted from Value Added Selling, by Tom Reilly, president of Tom Reilly Training

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